use large datasets on prices by products and stores from recent inflationary periods in Israel to compare simple menu cost models with simple uncertain and sequential trade (UST) models. The main empirical findings are (a) price erosion due to inflation explains only a tiny fraction of the...

The uncertain and sequential trading (UST) model of inventories behavior with iid shocks predicts that (a) the beginning of period inventories is a sufficient statistic for past variables and (b) an increase in the beginning of period inventories reduces output, employment, hours per employee,...

We use large unpublished data set about the prices by store of 381 products collected by the Israeli Bureau of Statistics during 1991-1992 in the process of computing the CPI. On average 24% of the stores changed their price where the average is over products and months. Using the standard...

While aggregate data do not show the investment echoes predicted by vintage-capital models, echoes arise in rates of entry and exit of firms at the industry level. Moreover, industries where prices decline rapidly experience early 'shakeouts'. The relation emerges naturally in a vintage-capital...

If machines are indivisible, a vintage capital model must give rise to income inequality. If new machines are always better than old ones and if society cannot provide everyone with a new machine all of the time, inequality will result. I explore this mechanism in detail. If technology resides...

We model Moore's Law as efficiency of computer producers that rises as a by-product of their experience. We find that (a) because computer prices fall much faster than the prices of electricity-driven and diesel-driven capital ever did, growth in the coming decades should be very fast, and that...

(Copyright: Elsevier)